Taxpayer asks:
I know you have probably gotten these questions hundreds of times, but sorry I need to ask again for my own benefit. First off, I have a little business on the web for which I am self employed and have no employees. This business has been around for a few years however I have not made over $500 before this year, so this is the first year I am going claim any income from it.
Should I have claimed this business in the past years even though I have not made much of anything? And is there a limit to where I have to claim and not claim it?
Taxgirl says:
Congrats on the growing success of your business! I hope it continues!
As to your question, you must report income from your business regardless of the amount. Whether it’s $1 or $1 million, it’s still taxable. Report the income on your Schedule C. If it’s minimal, you should be able to offset it with deductions. You can read more about deductions and their limits here.
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
